Visit great.gov.uk for guidance on how to research overseas markets as well as a range of other important issues for exporters.

China in world business rankings

Doing business in China

China is the great economic success story of the past 30 years. It’s now the world’s largest economy and a huge and expanding market for UK businesses. Jaguar Land Rover (JLR) is the UK’s biggest exporter to China, but is just one of many UK companies now operating in this important market.

Benefits for UK businesses

There are a number of reasons to choose China as an export destination:

largest country in the world by population with over 160 cities of more than a million inhabitants

fast growing consumer market resulting from increasing number of middle income consumers

Researching the Chinese market

China is not one single market. There are different regional economies and economic hubs. You will need to understand the regional economic and cultural differences that could impact the success of your product and develop the right strategy.

You should do as much market research and planning as possible before starting to sell your products and services in China, using both desk research and visits to the market. As the market is so complex you should also consider getting specialist market research help.

Setting up a company in China

Incorporating a company in China is a complex process requiring various approvals. You should seek professional advice early on due to the difficulties in altering business structure once a legal entity is incorporated. Foreign companies cannot legally employ Chinese staff unless the company is registered in China.

CBBC offers a ‘Launchpad’ service enabling companies to test the market before committing to a permanent presence.

You must not charge Value Added Tax (VAT) for online sales to China. You must fill out a customs declaration when you ship the products and keep ‘proof of export’.

Franchising in China

Franchising of brands continues to grow in China. There are opportunities for UK brands as increasing numbers of China’s cities develop the relevant infrastructure and local governments encourage the creation of new businesses.

There are challenges including the complexity of local regulations and finding the right franchise licensees.

UK-based consolidator exports to China

You can enter the Chinese market through a UK company that consolidates mixed containers to send to China. This will usually mean that the consolidator will do the paperwork and you will pay a fee to them.

Business incubators in China

CBBC’s ‘Launchpad’ service is one of a number of incubator schemes in China. It provides a simple, cost-effective, low-risk and legal means of having a presence in China, before you set up your own office, enabling you to test the market.

Getting finance to fulfil an export contract to China

Schemes are available to UK companies selling products and services to China to make it easier to fulfil an export contract and grow your business. Contact your bank or specialist financial organisations for assistance.

UK Export Finance (UKEF) has significant risk capacity to support exports to China. Contact one of UKEF’s export finance advisers for free and impartial advice on your finance options.

Getting paid in China

Your contract must be in a template suited to the Chinese market. It will need to specify the payment terms clearly. You must ensure the contract includes an arbitration clause.

Currency risks in China

China has a controlled currency reducing the impact of currency fluctuations. However many Chinese companies prefer to be invoiced in US dollars. It is sometimes possible to negotiate contracts in euros or sterling.

UK companies can set up accounts in China through their own bank (assuming it has a presence in China) or through a Chinese bank.

Legal considerations of doing business in China

China has what is officially termed ‘a socialist legal system with Chinese characteristics’. The legal system is based on both statutory law and custom.

You must identify whether the market is open to you and whether restrictions apply. In some sectors it is possible to set up a 100% foreign-owned company. In others, entry is possible only through a local partner.

Standards and technical regulations in China

China sets its own national standards. These are often referred to as ‘GB standards’, with some mandatory and others voluntary. A prefix code indicates the status, GB=mandatory and GB/T=voluntary.

Not all Chinese standards are aligned with established international standards. It’s important to check the Chinese laws, regulations, standards and certification requirements that apply to your area of business. Sectors such as medical and food require registration (and possibly testing) and certification.

China Compulsory Certification (CCC)

The CCC mark is a compulsory quality and safety mark. It’s generally required for manufactured products that could impact on human life and health, animals, plants, environmental protection and national security.

Goods imported into China that require the CCC mark and do not have it may be held by Chinese customs and be subject to penalties.

China’s National Certification and Accreditation Administration (CNCA) publishes a catalogue that lists all the products that require a CCC mark.

Packaging in China

Packaging must meet Chinese medical and safety regulations. It must not be poisonous or dangerous and must be easily degradable and recyclable. Wood packaging must carry the International Plant Protection Convention (IPPC) logo.

Product labelling in China

Goods for sale in China must be labelled in Chinese. For some products, information must be printed directly onto the packaging. Your labelling should always indicate which Chinese standards have been used where this is applicable.

Labels must clearly indicate country of origin of the product and the name and address of the Chinese distributor.

You must register your trademarks in China before entering the market. China uses a ‘first-to-file’ system for trademarks. You may lose legal protection if a similar trademark has already been registered within China.

Chinese customs uses a valuation database that lists the values of various imports based on international market prices, foreign market prices and domestic prices. Importers’ values are normally accepted, but if they are out of line with the valuation database there may be a recalculation.

The GACC also provides general information on customs procedures and tariffs.

Documentation in China

Goods exported to China must comply with domestic legislation. The documentation needed by Chinese customs varies according to product.

Certificates of quality, quantity or weight issued by manufacturers or public assessors are normally required. Certain goods will be inspected on arrival or must be accompanied by formal certification recognised by the Chinese government

Goods will be returned to the seller if they don’t conform with the certificates after re-inspection by the Chinese authorities. In addition, a claim may be lodged for compensation.

Shipping your goods to China

If you are not knowledgeable about international shipping procedures you can use a freight forwarder to move your goods. A forwarder will have extensive knowledge of documentation requirements, regulations, transportation costs and banking practices in China.